Enterprise Resource Planning
ERP Systems
Integrating the Organization from
End to End
• SCM systems focus specifically on suppliers
• CRM systems focus specifically on customers
The organization before ERP (lots of different systems)
Isolated Information: each department maintained their own systems
Update issues
Redundant/duplicate data
Inaccurate and different customer information in different databases
Different information formats in the different databases
Can’t access information maintained by another department
Can’t see a complete view of the entire organization
ERP: Bringing the Organization Together
• ERP – integrates all departments and functions throughout
an organization into a single IT system (or integrated set of IT
systems) so that employees can make enterprise wide
decisions by viewing enterprise wide information on all
business operations (consistent enterprise wide information)
Keyword in
ERP is
“enterprise”
ERP systems focus
on integrating all
processes,
departments and
operations for the
entire enterprise
We don’t need this ERP stuff. We
already have enterprise wide
software that we are all using. It is
called a SPREADSHEET.
S
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s
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Enterprise Resource Planning
• ERP systems collect data from across an organization
and correlates the data generating an enterprise wide
view that is consistent and real-time. Everyone
involved in sourcing, producing and delivering a
company’s product works with the same information.
•
Common
database
•
Complete
Data entry
required
•
Real time
•
Consistent
•
One true
picture
Components of ERP Software
• Three most common core components focus on internal
operations (accounting/finance, production/materials management and HR)
• Extended components typically focus on external operations
and require interactions with customers, suppliers and
business partners outside of the organization.
– Typically
Internet
enabled.
Make sure that
you know what
each component
typically handles.
Skipped details
slides follow
Enterprise Resource Planning
(ERP)
• At the heart of all ERP systems is a database, when a user
enters or updates information in one module, it is
immediately and automatically updated throughout the
entire system
Enterprise Resource Planning
(ERP)
• ERP systems automate business processes
ERP Benefits
1.
2.
Having integrated systems helps eliminate the mess of incompatible
applications that many businesses had previously started to use (also
didn’t have to fix those old legacy systems)
Integrate financial information and customer order information
3.
Everyone working with the same information eliminates
redundancies, reduces wasted time and removes misinformation
4.
Standardize and speed up manufacturing processes, as well as
reduce inventory
5.
ERP addresses the need for global information sharing and reporting.
6. One of the greatest benefits of an ERP system is helping people
understand how the organization is performing from an enterprise
perspective. Provides organizations with information that was
previously difficult (if not impossible) to obtain, allowing the
organization to perform more efficiently and effectively.
ERP Risks (Costs)
Difficult to integrate new ERP system with existing systems.
Employees resist new way of doing things.
• Costly in terms of money, time, amount of training required, and effort to
implement.
One vendor risks: too costly to simply switch to another system. Company
essentially held hostage.
#1 market share
Oracle: #2 market share
iSIS runs PeopleSoft
Microsoft Business
Solutions Great Plains
Dynamics
• Microsoft Dynamics Testimonials
– Xbox
– Microsoft Operations Puerto Rico
– Giant Bicycle
• SAP Testimonials
– Tasty Baking
– Veeco Instruments
– South Florida Water Management District